CJEU judgment opens door to backdated claims for unpaid holiday

A recent decision by the CJEU has expanded the scope of the right to carry over holidays to situation where workers are stopped from taking their leave for reasons other than sickness absence. Here’s a look at the case, and why employers need to pay attention.

 The background

Between 1999 – 2012 Mr King Worked for Sash Windows as a salesperson on a self-employed basis, and was paid on a commission only basis. Because he was self-employed, his contact did not state if he should receive annual leave.

In 2009, Sash Windows offered Mr King an employment contract, but he decided to remain self-employed. Mr King took his full annual leave entitlement on some years, but he did not request all of it in a number of other years. The tribunals have accepted that Mr King would have taken more holiday if he had been paid for his leave.

When Mr King reached 65, Sash Windows terminated his contract. Subsequently, Mr King brought claims for age discrimination and unpaid holiday pay under the WTR 1998 to the employment tribunal. The employment tribunal accepted these claims, stating that both the company and Mr King had wrongly believed that he was self-employed when he was, in fact, a worker.

The case

Mr King claimed that he was entitled to holiday pay relating to:

  1. paid leave accrued but untaken during Mr King’s final (incomplete) leave year
  2. holiday which Mr King actually took during the previous 13 years with Sash Windows but was not paid
  3. leave which Mr King was entitled to by virtue of being a worker whilst working with Sash Windows but had not actually taken

With respect to his claim for discrimination and paid holidays, Mr King succeeded in the employment tribunal. The third point above, however, was appealed to the EAT and then the Court of Appeal, with the court of Appeal referring the case to the CJEU.

What this means for employers

The decision is particularly topical given the recent high-profile worker status cases involving Uber and Deliveroo and others. Whilst the CJEU’s decision is not binding on UK employers at this stage, businesses with individuals on contracts without paid holiday will need to keep an eye on this case’s outcome as it could result in further holiday pay being due.

We’ll keep you updated as the holiday pay law moves on. In the meantime, you can click here to contact Alison for more expert advice.

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